The United Kingdom's FTSE 100 index recently closed lower, impacted by weak trade data from China, highlighting the interconnectedness of global markets and the vulnerability of UK blue-chip companies to international economic shifts. Despite these broader market challenges, identifying undervalued small-cap stocks with insider activity can offer unique opportunities for investors looking to navigate these turbulent times.
Top 10 Undervalued Small Caps With Insider Buying In The United Kingdom
Overview: Domino's Pizza Group operates a network of franchise and corporate pizza stores, generating income from sales to franchisees, corporate store operations, national advertising and ecommerce, rental income on properties, and various franchise-related fees; it has a market cap of approximately £1.50 billion.
Operations: The company's revenue is primarily derived from sales to franchisees (£461 million), corporate stores income (£42.9 million), national advertising and e-commerce income (£85.5 million), rental income on leasehold and freehold property (£1.9 million), and royalties, franchise fees, and change of hands fees (£82.4 million). Gross profit margin has shown an upward trend, reaching 47.48% in the latest period ending June 30, 2024.
PE: 15.4x
Domino's Pizza Group, a small cap in the UK, has recently announced share repurchases starting August 6, 2024. The company plans to buy back up to 39.5 million shares by August 1, 2025. Despite facing a dip in H1 sales (£326.8 million) and net income (£42.3 million), insider confidence remains high with significant share purchases earlier this year for £90.1 million. Domino's expects trading momentum and growth in orders for the rest of fiscal year 2024.
Overview: Hammerson is a property development and investment company focusing on flagship retail destinations in the UK, France, and Ireland with a market cap of £1.26 billion.
Operations: Hammerson generates revenue primarily from its flagship destinations in the UK, France, and Ireland. The company has experienced fluctuations in its net income margin, reaching as high as 1.937% and dropping to -7.897%. Operating expenses have varied but typically range between £42 million to £74 million per quarter.
PE: -33.0x
Hammerson has arranged a €175 million share of a €350 million non-recourse term loan with PIMCO Prime Real Estate, secured on Dundrum Town Centre. This move extends their average debt maturity from 2.2 to 2.9 years and maintains their LTV ratio. Despite reporting a net loss of £516.7 million for H1 2024, the company declared an interim dividend of £0.00756 per share, signaling confidence in future cash flows and stability within the UK retail sector.
Overview: Hochschild Mining is a company engaged in the exploration, mining, processing, and sale of silver and gold with key operations in San Jose, Inmaculada, and Pallancata; it has a market capitalization of approximately £0.50 billion.
Operations: Hochschild Mining generates its revenue primarily from its San Jose, Inmaculada, and Pallancata segments. Over recent periods, the company has experienced fluctuations in its gross profit margin, with a high of 42.85% and a low of 8.08%. Operating expenses have varied significantly as well, impacting net income margins which have ranged from -50.01% to 9.48%.
PE: -20.7x
Hochschild Mining, a smaller UK-based company, has recently shown promising insider confidence with CEO Eduardo Navarro purchasing 148,000 shares for £235,320 in July 2024. This move increased their holdings by over 52%. The company's production guidance for 2024 remains steady at 343,000-360,000 gold equivalent ounces. In Q2 2024, Hochschild reported silver production of 2.6 million ounces and gold production of 66.37 thousand ounces. Earnings are forecasted to grow by nearly 54% annually despite reliance on higher-risk external borrowing for funding.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LSE:DOM LSE:HMSO and LSE:HOC.
